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Samsung reports a drop in Q2 profit

Video credit: Reuters Studio
Published on July 31, 2019 - Duration: 01:15s

Samsung reports a drop in Q2 profit

Samsung reported a 56% drop in Q2 profit, owing to a fall in semiconductor prices amid an oversupply.

However, the global chip leader also said it expected the chip industry to start to recover in the second half.

Julian Satterthwaite reports.

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Samsung reports a drop in Q2 profit

Samsung Electronics reported a 56% drop in profit for its second quarter Wednesday (31 July) - with losses in both its chip and mobile businesses.

That, after a drop in prices of semiconductors owing to oversupply.

Shares in the company fell more than 3% after the announcement.

But the South Korean giant said it expected the chip market to start to recover in the second half of the year - coming out of a downturn linked to slowing sales of gadgets such as smart phones.

But Japanese curbs on the export of key materials used in phone displays and chips could sap third quarter profits.

The restrictions stem from a diplomatic dispute between Seoul and Tokyo over wartime forced labor.

Samsung rival SK Hynix says it will cut investment and production as a result.

As for Samsung's mobile business, it was weighed down by slower sales of some models and increased marketing expenses.

Now the company is launching new products in a bid to revive profits, including its first foldable device.

But analysts say weakness in the global smartphone market may limit results.

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